BNP and DOJ close in on settlement for sanctions violations

Due in large part to the crippling penalties imposed on companies caught distorting their dealings, transparency has become the standard for the financial industry. But despite examples being made of such financial firms as RBS and Credit Suisse, some banks are still learning the hard way that shady dealings often mean shelling out a sizeable amount to the U.S. regulators.

On June 23, France-based BNP Paribas SA became the latest to feel the wrath of Department of Justice (DOJ) for violating international law and standard transparency practices. The two groups are said to be closing in on a settlement of up to $9 billion and a series of additional penalties.

The bank is accused of hiding transactions in excess of $30 billion that violated international sanctions, including those imposed on Sudan and Iran. U.S. prosecutors allege that the transactions took place over a five-year period.

Those close to the ongoing negotiations say that In addition to the monetary penalties, the bank will also admit wrongdoing for its violation of the International Emergency Economic Powers Act; other high-profile settlements with the Department of Justice have allowed banks to skip over admissions of guilt for agreeing to pay out. BNP is also expected to lose the ability to transact in U.S. dollars for an undisclosed period of time.

French government officials have previously decried the severity of potential punishment, with France's President François Hollande calling it “unfair.” While the deal has yet to be finalized, the Wall Street Journalreports that French Finance Minister Michel Sapin is pushing for a quick resolution. "BNP cannot stay in this in-between situation," Sapin said in a radio address. "BNP needs to know what decisions will be taken by U.S. justice. The French government, the president, the prime minister and I have played our part."

The finalzation of the agreement is still pending, hoever sources claim that BNP’s guilty plea will come in July.

Executive Editor

Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...